Amazon's Stock Only Up 5% in 2025, Cloud Business Set to Drive 2026 Recovery
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5h ago
0mins
Source: Fool
- Cloud Growth Acceleration: Amazon's AWS achieved a 20% year-over-year revenue increase in Q3 2025, contributing 66% of operating profits despite only accounting for 18% of total sales, highlighting its critical role in profitability.
- Valuation Normalization: With a current P/E ratio of 29, Amazon's valuation aligns closely with that of major tech peers, down from earlier highs in 2025, presenting a favorable buying opportunity as the stock is poised for recovery in 2026.
- Strong Business Performance: Although Amazon's stock rose only 5% in 2025, the overall business showed robust performance, particularly with cloud computing boasting a 35% profit margin, underscoring the advantages of its diversified operations.
- Optimistic Market Outlook: Analysts predict that with valuation issues resolved, Amazon is set for improved performance in 2026, especially as AWS's ongoing growth is expected to drive stock price increases, making it a focal point for investors.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.69 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 234.340
Low
250.00
Averages
294.69
High
340.00
Current: 234.340
Low
250.00
Averages
294.69
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
